Global compliance system

ABSTRACT

A system for implementing a compliance program in a financial institution is provided and includes a list database for storing material information regarding a plurality of entities that is known to said financial institution. Also included is a list manager that receives a compliance query from an affiliate of the financial institution having a status. The list manager provides a compliance response to the affiliate based on the plurality of entities and according to the status of the affiliate.

CROSS-REFERENCE TO RELATED APPLICATION

[0001] This application claims the benefit of the filing date of U.S.Provisional Application serial number 60/289,975 entitled “GlobalCompliance System” which was filed on May 10, 2001.

BACKGROUND

[0002] The following invention relates to compliance systems and, inparticular, to a system for implementing a compliance program in ageographically-dispersed financial institution.

[0003] United States securities laws and the laws of other nations makeit unlawful, in some circumstances, for a person who possessesnon-public, material information about an issuer (“inside information”)of publicly traded securities to trade in the securities withoutdisclosing the information to the counterparty, or to “tip” others tothe information. Broker dealers that engage in investment bankingincluding both public underwriting and financial advice to publiccompanies in mergers and acquisitions transactions often receive insideinformation. As a result they would be disabled from proprietarytrading, including market making, publishing research, giving investmentrecommendations and managing money unless there were an effective way toprevent those engaged in those activities from learning about the insideinformation, as well as legal recognition of such policies andprocedures to prevent attribution of the inside information to thebroker dealer's traders, research analysts, portfolio manager and salespersonnel even in the absence of such actual knowledge.

[0004] The enactment of the Insider Trading and Securities FraudEnforcement Act (“ITSFEA”) in 1988 strengthened the Securities andExchange Commission's (“SEC”) enforcement powers over insider tradingand created an explicit duty for U.S. brokers dealers to establish,maintain and enforce procedures designed to control the flow on insideinformation. Neither the SEC nor the self regulatory organization's havepromulgated regulations specifying the policies and procedures that willbe deemed adequate in connection with the misuse of inside information.However, the SEC has identified several “minimum elements” necessary forthe establishment of adequate procedures. Specifically, broker dealersmust, among others things, (i) review customer, employee and proprietarytrading through effective maintenance of some combination of watch andrestricted lists, (ii) maintain a substantial Compliance Departmentcontrol over relevant interdepartmental communications, and (iii)conduct heightened reviews when a firm possesses inside information.

[0005] In implementing the required policies and procedures brokerdealers typically maintain a list, sometimes called a Grey List or WatchList, that includes all companies about which employees of the financialinstitution (for example, bankers) have knowledge of material non-publicinformation. New companies are added to the Grey List when financialinstitution employees become privy to material non-public informationregarding such companies. In order to add a company to the Grey List, abanker typically calls a compliance officer of the financial institutionindicating that the broker dealer has, or is likely to possess insideinformation regarding a particular company. The Compliance Departmentgathers the relevant information and places the company on the Grey Listin which case the employees that are involved in advising the companyare restricted from trading in the stock of the company. Furthermore,the broker dealer monitors the transactions of its employees andproprietary traders in the given company in order to detect potentialmisuse of the information.

[0006] In certain cases, when a financial institution's professionalinvolvement with a company is made public, trading restrictions areimposed. For example, if the financial institution is advising Company Ain its attempt to acquire Company B and the information has been madepublic, employees generally are restricted from trading the stock ofCompany A and Company B as well as engaging in any other investment oradvisory activities that creates an appearance of impropriety. Inaddition, restrictions on proprietary trading and customer solicitationalso may be imposed.

[0007] The prior art processes for managing the compliance obligationsof financial institutions typically include a compliance officer of theinstitution that receiving from the institution's bankers informationregarding the bankers' advising activities with respect to particularcompanies. Based on the nature of these activities and the status of anytransactions contemplated by the bankers' clients, the complianceofficer then places the particular companies on the Grey List, theRestricted List or no list altogether. If a particular company is placedon either the Grey List or Restricted List, then the compliance officeralso includes details of the contemplated transaction such as expectedtiming of the deal, the composition of the deal team, the details of thetransaction, etc.

[0008] Certain employees of many broker dealers are required by firmpolicy to pre-clear personal securities transactions. The employee mustinteract with the compliance officer to determine whether the tradeincludes a company on either the Grey List or Restricted List. If thetrade includes a company on the Restricted List, then the complianceofficer indicates to the employee that the employee is prohibited frommaking the contemplated trade. If the trade includes a company on theGrey List, then the compliance officer will generally not prohibit thetrade unless the inquiring employee is directly involved in advising thecompany and therefore would be in the position of knowing materialnon-public information regarding the company.

[0009] In addition to pre-clearing trades, the prior art complianceprocesses also include monitoring the trading activity of employeesthroughout the institution for each company on the Grey List. If thecompliance officer notices an increase in trading activity in any of thecompanies on the Grey List, then the compliance officer may initiate aninvestigation to determine whether the trading activity is a result ofimproper use of any material non-public information.

[0010] The prior art processes used by financial institutions formonitoring trading activities for compliance with insider traderregulations have numerous shortcomings. First, the process ofpre-clearing a trade typically requires the compliance officer toindividually review each trade request received from employees todetermine if any of the underlying companies are on the Grey List orRestricted List. This is a manually intensive and slow process resultingin two problems for financial institutions. First, this requires thatfinancial institutions allocate scarce and precious compliance resourcesto a purely ministerial function, precluding the opportunity to applythose resources against higher level compliance services. Second,employees desiring to execute trades may not receive clearance in timeto execute the trade at a favorable price. This problem is furtherexacerbated in fast-paced financial markets when waiting for acompliance officer to approve a trade is unacceptable. Maintaining acompliance program in globally dispersed financial institutions is evenmore problematic because of the difficulty in providing employees atrade pre-clearance that may depend on updates to the Grey List and/orRestricted List that originates several time zones away. The inabilityof the prior art compliance processes to efficiently manage the GreyList and Restricted List in a global context may result, for example, ina Japanese employee executing a trade in the stock of a particularcompany that a New York-based banker is advising because the RestrictedList has not yet been updated by the New York compliance officer who maynot be available to otherwise pre-clear the trade during Japanesetrading hours. Because the prior art compliance processes areinefficient and often ineffective at spotting Grey List and RestrictedList trading violations, a financial institution may be subject tosubstantial fines for its inability to monitor and prevent trades thatviolate insider trading regulations.

[0011] Accordingly, it is desirable to provide a system for implementinga compliance program in a geographically-dispersed financialinstitution.

SUMMARY OF THE INVENTION

[0012] The present invention is directed to overcoming the drawbacks ofthe prior art. Under the present invention a system for implementing acompliance program in a financial institution is provided and includes alist database for storing material information regarding a plurality ofentities that is known to said financial institution. Also included is alist manager that receives a compliance query from an affiliate of thefinancial institution having a status. The list manager provides acompliance response to the affiliate based on the plurality of entitiesand according to the status of the affiliate.

[0013] According to an exemplary embodiment, the material informationregarding the plurality of entities is partitioned into a Grey List anda Restricted List.

[0014] According to another exemplary embodiment, the affiliate is anemployee, the compliance query is a request by the employee to trade asecurity of an entity and the compliance response is a denial of therequest to trade if the entity is included in the partition of theplurality of entities included in the Restricted List.

[0015] According to yet another exemplary embodiment, the affiliate is atrader, the compliance request is a request to trade a security of anentity and the compliance response includes at least one of theplurality of entities included in the Restricted List and a clearancecode.

[0016] In still yet another exemplary embodiment, associated with the atleast one of the plurality of entities is a transaction type and therequest to trade has an activity type and wherein the clearance codedenies the request to trade based on the transaction type and theactivity type.

[0017] In an exemplary embodiment, the transaction type is selected froma group including mergers and acquisitions, initial public offerings andtender offers.

[0018] In another exemplary embodiment, the activity type is selectedfrom a group including principal activity, market making activity,positional trading activity and derivative trading activity.

[0019] In yet another exemplary embodiment, the affiliate is asupervisory analyst, the compliance request is a request to issue areport regarding an entity and the compliance response includes at leastone of the plurality of entities included in a combination of theRestricted List and the Grey List.

[0020] In still yet another exemplary embodiment, the complianceresponse includes at least one safe harbor provision that grants atleast a portion of the compliance request.

[0021] In an exemplary embodiment, the grant of the portion of thecompliance request is based on geography.

[0022] In another exemplary embodiment, the affiliate is a complianceofficer, the compliance request is a request to view at least a portionof a combination of the Restricted List and the Grey list and thecompliance response includes the portion of the combination of theRestricted List and the Grey List.

[0023] In yet another exemplary embodiment, the compliance responseincludes for at least one of the plurality of entities included in theportion a clearance code and a transaction type.

[0024] In still yet another exemplary embodiment, the complianceresponse includes for at least one of the plurality of entities includedin the portion a safe harbor provision.

[0025] In an exemplary embodiment, a surveillance system is includedthat receives the plurality of entities stored in the list database formonitoring trading activity in accordance with the compliance program.

[0026] In another exemplary embodiment, the list database receives theplurality of entities from a compliance officer in communications withthe system.

[0027] In yet another exemplary embodiment, the list database receivesat least a portion of the plurality of entities from a transactioninformation source.

[0028] In still yet another exemplary embodiment, the list databasereceives positional information relating to the financial institutionand the compliance response is based on the positional information.

[0029] In an exemplary embodiment, the list database receives affiliatedirectorship information and the compliance response is based on theaffiliate directorship information.

[0030] Under the present invention, a method for implementing acompliance program in a financial institution is provided and includesthe step of storing a plurality of entities in which the financialinstitution is associated with each of said plurality of entities. Next,a compliance query is received from an affiliate of the financialinstitution having a status. Finally, a compliance response is providedto the affiliate based on the plurality of entities and according to thestatus of the affiliate.

[0031] In an exemplary embodiment, the plurality of entities ispartitioned into a Grey List and a Restricted List.

[0032] In another exemplary embodiment, trading activity is monitored inaccordance with the compliance program based on the plurality ofentities stored.

[0033] In yet another exemplary embodiment, the plurality of entities isreceived from a compliance officer.

[0034] In still yet another exemplary embodiment, at least a portion ofsaid plurality of entities is received from a from a transactioninformation source.

[0035] In an exemplary embodiment, positional information relating tosaid financial institution is received and the compliance response basedon the positional information is provided.

[0036] In another exemplary embodiment, affiliate directorshipinformation is received and the compliance response based on theaffiliate directorship information is provided.

[0037] Under the present invention, a system is provided for monitoringtrading activity of a trading system operated by a financial institutionin accordance with a compliance program wherein the trading systemreceives a trade request to trade a security of an entity. The systemincludes a list database for storing a plurality of entities wherein thefinancial institution is associated with each of the plurality ofentities. The trading system receives the plurality of entities from thelist database and allows the trade request if the entity is not includedin any of the plurality of entities.

[0038] Under the present invention, a method for monitoring tradingactivity of a trading system operated by a financial institution inaccordance with a compliance program is provided and includes the stepof storing a plurality of entities wherein the financial institution isassociated with each of the plurality of entities. Next, a trade requestto trade a security of an entity is received. Next, it is determinedwhether the entity is included in the plurality of entities. Finally,the trade request is allowed if the entity is not included in theplurality of entities.

[0039] Accordingly, a method and system is provided for implementing acompliance program in a geographically-dispersed financial institution.

[0040] The invention accordingly comprises the features of construction,combination of elements and arrangement of parts that will beexemplified in the following detailed disclosure, and the scope of theinvention will be indicated in the claims. Other features and advantagesof the invention will be apparent from the description, the drawings andthe claims.

DESCRIPTION OF THE DRAWINGS

[0041] For a filler understanding of the invention, reference is made tothe following description taken in conjunction with the accompanyingdrawings, in which:

[0042]FIG. 1 is a block diagram of a global compliance system of thepresent invention;

[0043]FIG. 2 is a screenshot of an add transaction screen included inthe compliance system of FIG. 1;

[0044]FIG. 3 is a screenshot of an add issuer detail screen included inthe compliance system of FIG. 1;

[0045]FIG. 4 is a screenshot of an add deal team detail screen includedin the compliance system of FIG. 1;

[0046]FIG. 5 is a screenshot of a Grey List issuer detail screenincluded in the compliance system of FIG. 1;

[0047]FIG. 6 is a screenshot of a search transactions screen included inthe compliance system of FIG. 1;

[0048]FIG. 7 is a screenshot of a query results screen included in thecompliance system of FIG. 1;

[0049]FIG. 8 is a screenshot of a general view screen included in thecompliance system of FIG. 1;

[0050]FIG. 9 is a screenshot of a transaction comment screen included inthe compliance system of FIG. 1;

[0051]FIG. 10 is a screenshot of a deal team screen included in thecompliance system of FIG. 1;

[0052]FIG. 11 is a screenshot of a trader query response screen includedin the compliance system of FIG. 1;

[0053]FIG. 12 is a screenshot of a supervisory analyst searchtransactions screen included in the compliance system of FIG. 1;

[0054]FIG. 13 is a screenshot of a supervisory analyst query responsescreen included in the compliance system of FIG. 1;

[0055]FIG. 14 is a screenshot of a private bank result screen includedin the compliance system of FIG. 1;

[0056]FIG. 15 is a block diagram of a global compliance system accordingto an exemplary embodiment of the present invention;

[0057]FIG. 16 is a block diagram of a global compliance system accordingto another exemplary embodiment of the present invention; and

[0058]FIG. 17 is a block diagram of a global compliance system accordingto yet another exemplary embodiment of the present invention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

[0059] Referring now to FIG. 1, there is shown a block diagram of aglobal compliance system 101 of the present invention. System 101 istypically operated by a financial institution that receives materialinformation regarding their clients and therefore must take steps toprevent its employees, traders and analysts from engaging in activitiespertaining to those clients while the material information is notpublicly known. In an exemplary embodiment, the material information mayalso include, by way of non-limiting example, employee registrationstatus, human resources information and any other information that maybe relevant to performing a compliance function. According to anexemplary embodiment, system 101 is a computer system that executessoftware that performs the functions to be described below.

[0060] At the heart of system 101 is a list database 103 that contains aplurality of entities about which any of the employees (for example,bankers) of the financial institution has material non-publicinformation. The entities contained in list database 103 are partitionedinto a plurality of files including at least a restricted list file 105that includes those entities that are on the financial institution'sRestricted List and a Grey list file 107 that includes those entitiesthat are on the financial institution's Grey List. List database 103also includes a deal team file 109 that includes for each entityincluded in either restricted list file 105 or Grey list file 107 anyemployees of the financial institution that are a member of a team thatis in possession of material non-public information pertaining to theentity.

[0061] In an exemplary embodiment, restricted list file 105, Grey listfile 107 and deal team file 109 included in list database 103 arepopulated by a compliance officer that is affiliated with the financialinstitution for maintaining the financial institution's Restricted Listand Grey List. To populate list database 103, the compliance officeruses a compliance officer (CO) access device 111 (for example, apersonal computer) to communicate with system 101 using any knowncommunications method and protocol, such as the Internet. CO accessdevice 111 interfaces with a user interface 119 that provides thecompliance officer with the various data entry screens to enter andmaintain the Restricted List and Grey List, as will be described below.System 101 also includes a list manager that receives the complianceofficer's data entry and requests from user interface 119 and eitherretrieves the requested information from or causes information to bestored in list database 103, as appropriate.

[0062] Typically, the compliance officer receives from employees in thefinancial institution, such as bankers, the names of entities for whichthe employees have a relationship and therefore may be in possession ofmaterial non-public information. Generally, a banker may receive suchmaterial non-public information in the context of advising the entitywith respect to a transaction, such as a merger or an initial publicoffering. The compliance officers determine whether any particularentity forwarded by a banker should be added to the financialinstitution's Grey List or Restricted List or other lists that may bemaintained. If the compliance officer determines that a particularentity should be included in one of the lists, the compliance officerthen determines under what circumstances should trading activity or thepublication of research be allowed in the securities of that particularentity. Such a determination may be governed by policies set by thefinancial institution and/or government regulations as well as otherbusiness considerations. When the compliance officer receives from thefinancial institution employees information regarding entities that thecompliance officer determines should be included in either the financialinstitution's Restricted List or Grey List, the compliance officeroperates CO access device 111 to input this information into listdatabase 103. Before an analyst affiliated with the financialinstitution issues a report regarding an entity, a supervisory analyst(SA) typically checks whether the issuing entity is on either thefinancial institution's Restricted List or Grey list and, if so, whatrestrictions have been placed on publishing research about a particularsecurity issued by the entity. Supervisory Analysts use SA Access Device115 to access the system 101 using any known communication protocol. SAsare given a limited read only access to Restricted List and Grey Listentered by the Compliance Officers. Private Bankers access the system byusing Private Bank Access Device 125 to retrieve a list of securitieswhich are Restricted only to Private Bankers by the Compliance Officers.Some users are given a read only access to the Compliance Officer HomePage. These include people who have the rights to view the non-publicinformation but do not have the rights to make any changes to them. Theyaccess the system using the Read Only Access Device 113. Trader AccessDevice 127 is used by the trader typically to check whether the securityhe wishes to trade on is on the financial institution's Restricted Listand, if so, what restrictions have been placed on trading the particularsecurity. Finally, Administrative Access Device 117 is given to thesystem administrators. This access level gives administrators the rightto add new users to the system, delete deals that are not relevant, sendout Restricted List emails to the concerned persons and makeannouncements to all the compliance officers using the system. Onecompliance officer per region is given administrative access to thesystem.

[0063] Referring now to FIG. 2, there is shown a screenshot of an addtransaction screen 201 via which a compliance officer adds generalinformation regarding an entity to be added to list database 103.Initially, the compliance officer selects in a list type field 203 theparticular list—Restricted List, Grey List or Radar List—in which theentity is to be included. The compliance officer then adds additionalinformation regarding the entity and a contemplated transactioninvolving the entity in various fields. For example, the complianceofficer enters the name of the business group of the financialinstitution that is engaged with the entity into a business group field205; the date on which the entity's inclusion in the particular list iseffective in an effective date field 207; the expected date thecontemplated transaction is to take place in a transaction timing field209; a tickler date that will be used by the compliance officers as areminder in a tickler date field 211; the date on which the entity willbe removed from the particular list in a off date field 213 and the nameof the responsible compliance officer in a compliance officer field 215.Next, the compliance officer enters into a transaction type field 217the type of transaction regarding which the financial institution isadvising the entity. Such transaction types may be any type oftransaction in which an entity may be engaged or any type of advisoryservices a financial institution may provide pertaining to the entityincluding, by way of non-limiting example, a merger and acquisition, aninitial public offering and a tender offer. Finally, the complianceofficers enters a code name into a code name field 219, a briefdescription of the contemplated transaction in a transaction descriptionfield 221, tickler comments (as a reminder on the ticker date) in thetickler comments field 223 and comments regarding the transaction in atransaction comments field 223.

[0064] Referring now to FIG. 3, there is shown a screenshot of an addissuer detail screen 301 into which the compliance officer entersdetails regarding entity transactions for entities to be included in theRestricted List. The detailed information entered into screen 301 isprimarily divided into three sections: a sales and trading restrictionssection 335, a research suppressions section 337 and an additionalissuer information section 339. In sales and trading restrictionssection 335, the compliance officer enters information that describesthe extent to which salespeople and traders associated with thefinancial institution are restricted in trading the securities of theparticular entity. For example, the compliance officer enters arestriction code into a restriction code field 303. The restriction codeindicates what activities for each transaction type involving the entityor its securities are permissible and/or prohibited. Transaction typesmay include, by way of non-limiting example, M&A transactions, initialpublic offerings and tender offers. For each transaction type, tradersand salespeople may be allowed/prohibited to engage in certain activitytypes including, by way of non-limiting example, market making activity,principal trading activity, positional trading activity, proprietarytrading activity and client solicitation. For instance, if thetransaction type is M&A (i.e., the financial institution is advising theentity in an M&A transaction), then the trader may be prohibited fromengaging in proprietary trading activity (trading on behalf of thefinancial institution). Similarly, any other transaction types andactivity types may be defined and a restriction code may be designatedto indicate to a trader what activity types are permissible/restrictedfor a given transaction type.

[0065] The compliance officer also enters into an applicable class field305 the type of security for which the restriction applies. Finally, thecompliance officer may enter any additional comments regarding therestriction in a restriction comments field 306. The information thecompliance officer enters into sales and trading restrictions section327 are provided to an inquiring trader to guide the trader's tradingactivities, as will be described below.

[0066] The compliance officer also enters information into researchsuppressions section 337 for the purpose of restricting the activitiesof research analysts that may be issuing a research report pertaining toan entity on the Restricted List. First, the compliance officer entersinto a forecast field 307 the scope to which the financial institutionanalysts are restricted from issuing a forecast regarding an entity ofthe Restricted List. For example, the compliance officer may select a“Global” restriction that indicates that the analysts are restrictedfrom issuing a forecast regarding the entity anywhere in the world. Incertain cases the compliance officer may only restrict an analyst fromissuing a forecast about a particular entity in the United States orsome other region of the world. In other cases, the compliance officermay not restrict analysts from issuing a forecast altogether. Thecompliance officer also enters into a Rating/Recommendation field 309the scope to which the analysts may issue a rating/recommendationregarding the entity. For example, the compliance officer may restrictthe analysts from issuing a rating recommendation globally, regionallyor not at all. Next, the compliance officer will indicate in a SafeHarbor: Rule 138 field 311 and a Safe Harbor: Rule 139 field 317 whetherthe Rule 138 and/or Rule 139 safe harbors, respectively, apply for theparticular entity. In a Research Text field 315, the compliance officerenters the geographic regions in which the analysts are restricted fromissuing research text.

[0067] In addition, the compliance officer enters into a Role field 313the role the financial institution is playing in the transactioninvolving the particular entity. For example, if the financialinstitution is a Manager/Co-Manager of an initial public offeringinvolving the entity, then the compliance officers enters thisinformation into Role field 313. Sensitivity level of the security isset in sensitivity field 318. The compliance officer also enters into anSA comments field 319 in research suppressions section 337 any commentsappropriate for a supervisory analyst, into CO comments field 321 anycomments appropriate for compliance officers and into DisclaimerLanguage field 323 any specific disclaimer language an analyst mustinclude in a research report pertaining to an entity that is in theRestricted List.

[0068] Screen 301 also includes an additional user information section339 that includes a local code field 325 for entering the Bloombergsymbol if it is not obtained from the database that contains thesecurity details. Aka field 327 is used to enter aliases to the selectedsecurity. For example, International Business Machines is also know asIBM, International Busn Machine etc., and these aliases can be enteredin aka field 327. This feature is useful as the user can search for asecurity using the alias names. The compliance officer selects eitherPrivate Bank, Asset Management or Private Bank Asset Management if asecurity has to be on the Restricted List for the Private Bankers. It isset to Not Applicable if it does not concern the Private Bankers. MarketMaker is set to either Yes or No in the Market Maker field 331 andResearch Coverage is set to either Yes or No in the Research Coveragefield 333.

[0069] Referring now to FIG. 4, there is shown a screenshot of an adddeal team detail screen 401 into which the compliance officer entersdetails regarding the deal team in the financial institution that isadvising the particular entity regarding a transaction. Screen 401includes fields to enter pertinent information regarding each member ofthe team including a role field 403 for enter the deal team member'srole, a sector/product group field 404 for entering the group to whichthe team member belongs, an effective on date field 405 for entering thedate the particular team member joined the team and a comments field406.

[0070] Referring now to FIG. 5, there is shown a screenshot of a GreyList issuer detail screen 501 into which the compliance officer entersdetails regarding entities to be included in the Grey List. In screen501, the sensitivity level of the security is selected in thesensitivity field 503, the compliance officer enters any commentsregarding the entity that is suitable for a supervisory analyst into aSA comments field 505. “No research allowed-IPO” is an example of an SAcomment entered by the compliance officer that will be used as areference by the supervisory analysts. Any comments regarding the entitythat is suitable for a compliance officer is entered into a CO commentsfield 507, (“Watch research” is an example of the CO comment that may beentered by a Compliance Officer). In addition, a local code is enteredinto a local code field 509, a aka into aka field 511, a market makerinto market maker field 513 and research coverage into research coveragefield 515.

[0071] Referring now to FIG. 6, there is shown a screenshot of a searchtransactions screen 601 via which a compliance officer may search listdatabase 103 for entities that match a particular search criteria. Inthe exemplary embodiment depicted in screen 601, a compliance officermay search list database 103 by selecting in a transaction status field603 a transaction status (for e.g., Open, Closed or All), for thepurpose of retrieving from list database 103 those entities that areinvolved in a transaction that meets the selected transaction status.The compliance officer selects in a list type field 605 the type of listthat is to be searched including the Grey List, the Restricted List, theRADAR List or a combination of all of these lists. The complianceofficer also selects the security search criteria by either choosing thesecurity name search, Bloomberg symbol search, cusip code search, isincode search, sedol code search, Reuters code search or the code namesearch in the search criteria field 607 and enters into a security namefield 608 the name of a particular entity to be searched for in listdatabase 103. In an exemplary embodiment, the input into security namefield 608 may be a partial input and the search mechanism used may be afuzzy search or any other search mechanism that provides search resultsbased on a partial input. Reports Section 609 has reports that generateActive Grey Lists, Active Restricted Lists, Active Grey and RestrictedLists, Recent Grey Lists, Recent Restricted Lists and Recent Grey andRestricted Lists. Compliance officers and Supervisory Analysts haveaccess to these reports. Tickler Comments Report is used only by theCompliance Officers. There is a section for Announcements 611 where theadministrator can enter comments that will be viewed by all thecompliance officers.

[0072] Referring now to FIG. 7, there is shown a screenshot of a queryresults screen 701 that is generated by a search request invoked bysearch transactions screen 601. Screen 701 displays various fields ofinformation for each entity that meet the search criteria including aTxn ID field 703 which is a unique identifier for a particular deal, alist field 705 that indicates the list type in which the entity isincluded, an issuer field 707 that is the name of the entity, an akafield 709 that is the alias for the security, a transaction field 711that indicates the transaction type regarding which the financialinstitution is advising the entity, a date on field 713 that is the datethe entity was placed on the particular list (for the given transaction)and a date off field 715 that is the date the entity (for a particulartransaction) is to be removed from the given list. In an exemplaryembodiment, any other suitable information may also be displayed inresults screen 701.

[0073] Referring now to FIG. 8, there is shown a screenshot of a generalview screen 801 that is displayed when an entity listed in resultsscreen 701 is selected using the txn Id (for e.g., by clicking on theentity with a computer mouse). A compliance officer may also accessesgeneral view screen 701 by activating a general information link 813.General view screen 801 is divided into four sections: a generalinformation section 803 that summarizes the information the complianceofficer entered via general information screen 201, an issuerinformation section 805 that summarizes information regarding aparticular security of an entity entered via the issuer informationscreen 301 and also additional information retrieved from the databasethat stores the issuer details like the cusip, sedol, Bloomberg symbol,isin etc., a research suppressions section 807 and a sales & tradingrestrictions section 809 that summarizes information entered via issuerdetail screen 301. In an exemplary embodiment, the compliance officermay directly edit any information contained in general view screen 801.

[0074] Referring now to FIG. 9, there is shown a screenshot of atransaction comment screen 901 that includes any comments made regardinga particular entity for a given transaction. A compliance officeraccesses transaction comment screen 901 by activating an additionalcomment link in the general information section 803. Transaction commentscreen 901 includes a comment date section 903 that lists the date, thecomment author section 905 that lists the name of the author and thecontent section 907 that contains the comment made. A comment field 905is included that displays the text of all the comments made by eachauthor listed in comment author section 909. A comment entered into thecomment field 909 can be submitted as either a transaction comment byclicking on submit button 913 or can be submitted as the CFD comment byclicking on the submitcfd button 911. The CFD comment is entered by thecompliance officers regarding the entity that is suitable for theCorporate Finance Department.

[0075] Referring now to FIG. 10, there is shown a screenshot of a dealteam screen 1001 that lists information regarding all the members of ateam that is involved with advising the entity for the particulartransaction. A compliance officer may accesses deal team screen 1001 byactivating a deal team link 811.

[0076] Thus, a compliance officer uses CO access device 111 to interactwith system 101 for maintaining restricted list file 105, Grey list file107 and deal team file 109 stored in list database 103.

[0077] Before a trader affiliated with the financial institution placesa trade in a security issued by an entity, either for a financialinstitution client or on behalf of the financial institution itself, thetrader is typically required to check whether the issuing entity is onthe financial institution's Restricted List and, if so, whatrestrictions have been placed on trading the particular security. Tomake such a determination, the trader operates a trader access device127 (for example, a personal computer executing suitable software) thatcommunicates with system 101 using any known communications method andprotocol, such as the Internet. Trader access device interfaces withuser interface 119 for sending to list manager 121 a query from thetrader regarding whether a particular entity is on the Restricted List.List manager 121 retrieves the responsive information from restrictedlist file 105 contained in list database 103 and forwards theinformation to trader access device 127 via user interface 119.

[0078] Referring now to FIG. 11, there is shown a screenshot of a traderquery response screen 1101 according to an exemplary embodiment thatincludes at least a portion of the Restricted List that is responsive toa trader's query. Response 1101 includes a new addition section 1103that lists entities that have been recently added to the RestrictedList. For each entity included in new addition section 1103, informationis provided upon which the trader can determine whether a contemplatedtrade is restricted. For example, included is an issuer field 1104 thatlists the name of the particular entity, a plurality of issuer ID numberfields 1105 that include the ID number of the entity security that isrestricted, an RL code field 1106 that indicates the restriction levelset by the compliance officer (in restriction code field 303 of issuerdetail screen 301) for the particular entity, a date field 1107 thatindicates the date the entity was placed on the Restricted List and thedate it is expected that the entity will be removed from the RestrictedList guide (as provided by the compliance office via general informationscreen 201), a location field 1108 that indicates the location withinthe financial institution from which the restriction regarding theentity originated, a transaction type field 1109 that indicates thenature of the relationship between the financial institution and theentity and the type of transaction for which the financial institutionis advising the entity and a comments field 1110 that provides thetrader with any comments regarding the restriction that the complianceofficer has inserted into restriction comments field 306 of issuerdetail screen 301.

[0079] Response 1101 also includes a removed section 1111 that providessimilar information as provided in new additions section 1103 forentities that have been recently removed to the Restricted List.

[0080] Based on the restriction included in RL code field 1106 (asdescribed above), the inquiring trader determines whether contemplatedtransaction is restricted.

[0081] Before an analyst affiliated with the financial institutionissues a report regarding an entity, a supervisory analyst (SA)typically checks whether the issuing entity is on either the financialinstitution's Restricted List or Grey List and, if so, what restrictionshave been placed on publishing research about a particular securityissued by the entity. To make such a determination, the SA operates anSA access device 115 (for example, a personal computer executingsuitable software) that communicates with system 101 using any knowncommunications method and protocol, such as the Internet. SA accessdevice interfaces with user interface 119 for sending to list manager121 a query from the SA regarding whether a particular entity is oneither the Restricted List or Grey List. List manager 121 retrieves theresponsive information from restricted list file 105 and Grey list file107 contained in list database 103 and forwards the information to SAaccess device 115 via user interface 119.

[0082] Referring now to FIG. 12, there is shown a screenshot of asupervisory analyst home page screen 1201. In the exemplary embodimentdepicted in screen 1201, the supervisory analyst selects in a list typefield 1203 the type of list that is to be searched including the GreyList, the Restricted List or a combination of all of these lists. The SAalso selects the security search criteria by either choosing thesecurity name search, Bloomberg symbol search, cusip code search, isincode search, sedol code search, Reuters code search or the code namesearch in the search criteria field 1205 and enters into a security namefield 1207 the name of a particular entity to be searched for in listdatabase 103. In an exemplary embodiment the input into security namefield 1207 may be a partial input and the search mechanism used may be afuzzy search or any other search mechanism that provides search resultsbased on a partial input if the exact match section 1209 is notchecked—otherwise it retrieves the exact search criteria results.Reports Section 609 has reports that generate Active Grey Lists, ActiveRestricted Lists, Active Grey and Restricted Lists, Recent Grey Lists,Recent Restricted Lists and Recent Grey and Restricted Lists. LastUpdate Section 1211 displays the date and time of the latest addition ofGrey or Restricted List made to the system by the Compliance Officer andis used as a reference by the supervisory analysts.

[0083] Referring now to FIG. 13, there is shown a screenshot of asupervisory analyst query response screen 1301 according to an exemplaryembodiment that includes at least a portion of the Restricted List andGrey List that is responsive to an SA's query. Response 1301. For eachentity included in search results section 1323, information is providedupon which the SA can determine whether the publication of a particularresearch report is permissible. For example, included is an issuer field1307 that lists the name of the particular entity, a plurality of issuerID number fields 1309 that include the ID number of the entity securitythat is restricted, a date field 1311 that indicates the date the entitywas placed on the particular list and the date it is expected that theentity will be removed from the list and a location field 1208 thatindicates the location within the financial institution from which theentry regarding the entity originated. Also included is a list field1303, a sensitivity level field 1305, a safe harbor field 1315 thatcorrespond to fields in research suppression section 329 of issuerdetail screen 301 in which the compliance officer indicates under whatcircumstances an analysts report regarding the entity may be published,as described above. In an exemplary embodiment, other fields may beincluded such as a field displaying any comments from the complianceofficer regarding the entity, the names of deal team members who areover the wall as in field 1317 and the transaction type as in field1319. A query section 1321 is included for an easier searchfunctionality for the users.

[0084] Referring to FIG. 14, there is shown a screenshot of a privatebank query response screen 1401. In the exemplary embodiment depicted inscreen 1401, the private banker is given access to all the securitiesthat is Restricted for the private bankers by the Compliance Officers.Screen 1401 displays various fields of information for each entityincluding an issuer field and aka field 1403 that is the name of theentity and its alias, a date field 1405 that is the date the entity wasplaced on the particular list (for the given transaction) and the datethe entity (for a particular transaction) is to be removed from thegiven list, ,the plurality of issuer ID number fields 1407 that includethe ID number of the entity security that is restricted, the countrysection 1409 for that security, the name of the compliance officer whoentered the deal in the section 1411, a transaction field 1413 thatindicates the transaction type regarding which the financial institutionis advising the entity and a Restriction field 1415 that displays therestriction on that security. In an exemplary embodiment, any othersuitable information may also be displayed in results screen 701.

[0085] As with a query provided to system 101 by a trader, a queryprovided by an SA may include all or party of the name of a particularentity in which case Response 1201 will include those entities thatmatch the provided search phrase. Also, it will be obvious to providethe SA with a mechanism for searching on other fields contained inrestricted file list 105 and Grey list file 107.

[0086] Typically, before an employee of a financial institution isallowed to transact in a security in the employee's personal account,the employee is required to check whether the entity issuing thesecurity is on the financial institution's Restricted List. To make sucha determination, the employee operates an employee access device (forexample, a personal computer executing suitable software) thatcommunicates with system 101 using any known communications method andprotocol, such as the Internet. Employee access device interfaces withuser interface 119 for sending to list manager 121 a query from theemployee as to whether the contemplated transaction is prohibited basedon the Restricted List contained in restricted list file 105. Based onthe information contained in restricted list file 105, list manager 121determines whether the employee transaction is permissible and forwardsthe response to employee access device 117 via user interface 119.

[0087] Accordingly, the present invention provides a system and methodfor implementing a compliance program in a geographically-dispersedfinancial institution. Because the financial institution's RestrictedList and Grey List are centrally stored in list database 103 andaccessible using any known communications method and protocol, such asthe Internet, any affiliate of the financial institution, such as atrader, SA and employee, may access system 101 in order to determinewhether a contemplated action is allowed based on the contents of theRestricted List and Grey List and the financial institutions complianceprogram. In this way, a compliance officer need not be contacted by arequesting affiliate in order to approve each contemplated transactionthereby significantly increasing the rate at which contemplatedtransactions are approved. Furthermore, because system 101 maystructured to be globally-accessible (for example, if system 101 isconnected to the Internet), information entered into system 101 by afinancial institution's compliance officer located in a first time zonebecomes immediately accessible by affiliates of the financialinstitution located in a second time zone. Thus, contemplated trades orresearch report publications may be approved immediately without havingto directly query a responsible compliance officer that may be difficultto reach.

[0088] System 101 also includes an export interface 123 that receiveslist information from list database 103 via list manager 121 for exportto external systems. In an exemplary embodiment, export interface 123exports to external market data systems the entities included in thefinancial institution's Restricted List so that securities issued bysuch entities that are displayed in such market systems can be labeledas a restricted securities. An example of such an external market datasystem is a Bloomberg system that receives the restricted listinformation from export interface 123 and labels the securities itdisplays as restricted, where appropriate, so that affiliates of thefinancial institution that use the Bloomberg system can see at a glancewhat securities are restricted.

[0089] Export interface 123 also exports Restricted List and Grey listinformation to a surveillance systems that is operated by the financialinstitution to determine that trades performed by traders and employeesof the financial institution do not violate the financial institution'scompliance program. Surveillance system monitors trades executed throughthe financial institution's trading systems and determines whether anytrades involves securities of entities that are included in theRestricted List and whether the particular trade was permissible basedon the scope of the restriction associated with such entities. Thesurveillance system also determines whether any trades involvesecurities of entities that are on the Grey List and, if so, is there atrading pattern in such securities that may indicate a violation of thefinancial institution's compliance program. In either case, thesurveillance system may also notify a compliance officer of trades andtrading patterns that may be impermissible and that therefore meritfurther scrutiny.

[0090] Referring now to FIG. 15, there is shown a block diagram of aglobal compliance system 1501 according to an exemplary embodiment ofthe present invention. Elements that are similar to elements of system101 of FIG. 1 are identically labeled and a detailed description thereofis omitted.

[0091] System 1501 includes an input interface 1509 that receivesinformation from three sources: a positional information source 1503, atransaction information source 1505 and a directorship informationsource 1507. Positional information source 1503 includes the securitiesin which the financial institution maintains a position that is at thefinancial institution's position limit for that security. Typically,positional information is derived from analyzing information fromseveral sources including, for example, all the financial institution'strading systems and the financial institution's books and records. Onceit is determined in which securities the financial institution hasreached its position limits, this information is fed to system 1501 inthe form of positional information source 1503. This information is thenforwarded by input interface 1509 to list manager 121 that determinesthe entities that should be restricted based on the position limitsreached by the financial institution. List manager 121 then causes suchrestrictions to be stored in restricted list file 105 contained in listdatabase 103.

[0092] Transaction information source 1505 includes informationregarding the transactions the financial institution's bankers areengaged in. This information may be derived from systems in that areused by the financial institution's bankers to document each ongoingtransaction. Based on this information, list manager 121 determinesthose entities that are included in any of the transactions and thattherefore should be included in either the Restricted List or Grey Listand under what circumstances should trading and research publication berestricted. List manager 121 then causes such restrictions to be storedin restricted list file 105 contained in list database 103.

[0093] Directorship information source 1507 includes informationregarding the directorships any financial institution affiliatesmaintain that may give rise to a trading/publication restriction. Basedon this information, list manager 121 determines those entities that forwhich an affiliate holds a directorship and that therefore should beincluded in either the Restricted List or Grey List and under whatcircumstances should trading and research publication be restricted.List manager 121 then causes such restrictions to be stored inrestricted list file 105 contained in list database 103.

[0094] Thus, while in system 101, a compliance officer was responsiblefor inputting list information into system 101, in system 1501, suchinformation is automatically received from positional information source1503, transaction information source 1505 and directorship informationsource 1507 and stored in list database 103. In addition toautomatically receiving such information, a compliance officer mayoperate CO access device 111 to input additional compliance informationor modify existing compliance information.

[0095] Referring now to FIG. 16, there is shown a block diagram of aglobal compliance system 1601 according to another exemplary embodimentof the present invention. Elements that are similar to elements ofsystem 1501 of FIG. 15 are identically labeled and a detaileddescription thereof is omitted.

[0096] In system 1601, export interface 123 also exports Restricted Listand Grey List information to the financial institution's trading system1511. In this embodiment, trading system 1511 monitors the entities thatare contained in the Restricted List and either flag or prevent tradingin securities issued by such entities that violate any restrictionscontained in the list. In addition, system 1601 monitors tradingpatterns in securities included in the Grey List to determine whetherany such patterns is in violation of the financial institution'scompliance program. In either case, trading system 1511 may alert acompliance officer of any such trades or trading patterns for furtherinvestigation.

[0097] Accordingly, system 1601 automates the process by whichinformation is received for inclusion in either the Restricted List orGrey List thereby reducing any dependence on compliance officers togather and input such information.

[0098] Referring now to FIG. 17, there is shown a block diagram of aglobal compliance system 1701 according to yet another exemplaryembodiment of the present invention. Elements that are similar toelements of system 1601 of FIG. 16 are identically labeled and adetailed description thereof is omitted.

[0099] In system 1701, input interface 1509 also receives informationfrom trading systems 1511 upon which further refinement can be made tothe information contained in either the Restricted List or Grey List.

[0100] Based on the above description, it will be obvious to one ofordinary skill to implement the system and methods of the presentinvention in one or more computer programs that are executable on aprogrammable system including at least one programmable processorcoupled to receive data and instructions from, and to transmit data andinstructions to, a data storage system, at least one input device, andat least one output device. Each computer program may be implemented ina high-level procedural or object-oriented programming language, or inassembly or machine language if desired; and in any case, the languagemay be a compiled or interpreted language. Suitable processors include,by way of example, both general and special purpose microprocessors.Furthermore, alternate embodiments of the invention that implement thesystem in hardware, firmware or a combination of both hardware andsoftware, as well as distributing modules and/or data in a differentfashion will be apparent to those skilled in the art and are also withinthe scope of the invention. In addition, it will be obvious to one ofordinary skill to use a conventional database management system such as,by way of non-limiting example, Sybase, Oracle and DB2, as a platformfor implementing the present invention.

[0101] It will thus be seen that the objects set forth above, amongthose made apparent from the preceding description, are efficientlyattained and, since certain changes may be made in carrying out theabove process, in a described product, and in the construction set forthwithout departing from the spirit and scope of the invention, it isintended that all matter contained in the above description shown in theaccompanying drawing shall be interpreted as illustrative and not in alimiting sense.

[0102] It is also to be understood that the following claims areintended to cover all of the generic and specific features of theinvention herein described, and all statements of the scope of theinvention, which, as a matter of language, might be said to falltherebetween.

1. A system for implementing a compliance program in a financialinstitution, comprising; a list database for storing materialinformation regarding a plurality of entities that is known to saidfinancial institution; a list manager, said list manager receiving acompliance query from an affiliate of the financial institution having astatus, said list manager providing a compliance response to saidaffiliate based on said plurality of entities and according to saidstatus of said affiliate.
 2. The system of claim 1, wherein saidmaterial information regarding the plurality of entities is partitionedinto a Grey list and a Restricted List.
 3. The system of claim 2,wherein said affiliate is an employee, said compliance query is arequest by said employee to trade a security of an entity and saidcompliance response is a denial of said request to trade if said entityis included in the partition of said plurality of entities included insaid Restricted List.
 4. The system of claim 2, wherein said affiliateis a trader, said compliance request is a request to trade a security ofan entity and said compliance response includes at least one of saidplurality of entities included in said Restricted List and a clearancecode.
 5. The system of claim 4, wherein associated with said at leastone of said plurality of entities is a transaction type and said requestto trade has an activity type and wherein said clearance code deniessaid request to trade based on said transaction type and said activitytype.
 6. The system of claim 5, wherein said transaction type isselected from a group including mergers and acquisitions, initial publicofferings and tender offers.
 7. The system of claim 5, wherein saidactivity type is selected from a group including principal activity,market making activity, positional trading activity and derivativetrading activity.
 8. The system of claim 2, wherein said affiliate is asupervisory analyst, said compliance request is a request to issue areport regarding an entity and said compliance response includes atleast one of said plurality of entities included in a combination ofsaid Restricted List and said Grey List.
 9. The system of claim 8,wherein said compliance response includes at least one safe harborprovision that grants at least a portion of said compliance request. 10.The system of claim 9, wherein said grant of said portion of saidcompliance request is based on geography.
 11. The system of claim 2,wherein said affiliate is a compliance officer, said compliance requestis a request to view at least a portion of a combination of saidRestricted List and said Grey List and said compliance response includessaid portion of the combination of said restricted list and said GreyList.
 12. The system of claim 11, wherein said compliance responseincludes for at least one of said plurality of entities included in saidportion a clearance code and a transaction type.
 13. The system of claim11, wherein said compliance response includes for at least one of saidplurality of entities included in said portion a safe harbor provision.14. The system of claim 1, further comprising a surveillance systemwherein said surveillance system receives said plurality of entitiesstored in said list database for monitoring trading activity inaccordance with said compliance program.
 15. The system of claim 1,wherein said list database receives said plurality of entities from acompliance officer in communications with said system.
 16. The system ofclaim 1, wherein said list database receives at least a portion of saidplurality of entities from a transaction information source.
 17. Thesystem of claim 1, wherein said list database receives positionalinformation relating to said financial institution and wherein saidcompliance response is based on said positional information.
 18. Thesystem of claim 1, wherein said list database receives affiliatedirectorship information and wherein said compliance response is basedon said affiliate directorship information.
 19. A method forimplementing a compliance program in a financial institution, comprisingthe steps of; storing a plurality of entities, said financialinstitution being associated with each of said plurality of entities;receiving a compliance query from an affiliate of the financialinstitution having a status; and providing a compliance response to saidaffiliate based on said plurality of entities and according to saidstatus of said affiliate.
 20. The method of claim 19, further comprisingthe step of: partitioning said plurality of entities into a Grey Listand a Restricted List.
 21. The method of claim 20, wherein saidaffiliate is an employee, said compliance query is a request by saidemployee to trade a security of an entity and said compliance responseis a denial of said request to trade if said entity is included in oneof said plurality of entities included in said Restricted List.
 22. Themethod of claim 20, wherein said affiliate is a trader, said compliancerequest is a request to trade a security of an entity and saidcompliance response includes at least one of said plurality of entitiesfrom said Restricted List that includes said entity and a clearancecode.
 23. The method of claim 22, wherein said at least one of saidplurality of transactions have a transaction type and said request totrade has an activity type and wherein said clearance code denies saidrequest to trade based on said transaction type and said activity type.24. The method of claim 23, wherein said transaction type is selectedfrom a group including mergers and acquisitions, initial publicofferings and tender offers.
 25. The method of claim 23, wherein saidactivity type is selected from the group including principal activity,market making activity, positional trading activity and derivativetrading activity.
 26. The method of claim 20, wherein said affiliate isa supervisory analyst, said compliance request is a request to issue areport regarding an entity and said compliance response includes atleast one of said plurality of entities from a combination of saidRestricted List and said Grey List that includes said entity.
 27. Themethod of claim 26, wherein said compliance response includes at leastone safe harbor provision that grants at least a portion of saidcompliance request.
 28. The method of claim 27, wherein said grant ofsaid portion of said compliance request is based on geography.
 29. Themethod of claim 20, wherein said affiliate is a compliance officer, saidcompliance request is a request to view at least a portion of acombination of said Restricted List and said Grey List and saidcompliance response includes said portion of the combination of saidRestricted List and said Grey List.
 30. The method of claim 29, whereinsaid compliance response includes for at least one of said plurality ofentities included in said portion a clearance code and a transactiontype.
 31. The method of claim 29, wherein said compliance responseincludes for at least one of said plurality of entities included in saidportion a safe harbor provision.
 32. The method of claim 19, furthercomprising the step of: monitoring trading activity in accordance withsaid compliance program based on said plurality of entities stored. 33.The method of claim 19, further comprising the step of: receiving saidplurality of entities from a compliance officer.
 34. The method of claim19, further comprising the step of: receiving at least a portion of saidplurality of entities from a from a transaction information source. 35.The method of claim 19, further comprising the steps of: receivingpositional information relating to said financial institution; andproviding said compliance response based on said positional information.36. The method of claim 19, further comprising the steps of: receivingaffiliate directorship information; and providing said complianceresponse based on said affiliate directorship information.
 37. A systemfor monitoring trading activity of a trading system operated by afinancial institution in accordance with a compliance program, saidtrading system receiving a trade request to trade a security of anentity, the system comprising; a list database for storing a pluralityof entities, said financial institution being associated with each ofsaid plurality of entities; wherein said trading system receives saidplurality of entities from said list database and wherein said tradingsystem allows said trade request if said entity is not included in saidplurality of entities.
 38. The system of claim 37, wherein said entityis included in at least one of said plurality of entities having atransaction type and said request to trade has an activity type andwherein said trading system allows said trade request based on saidtransaction type and said activity type.
 39. The system of claim 38,wherein said transaction type is selected from a group including mergersand acquisitions, initial public offerings and tender offers.
 40. Thesystem of claim 38, wherein said activity type is selected from a groupincluding principal activity, market making activity, positional tradingactivity and derivative trading activity.
 41. The system of claim 37,wherein said list database receives at least a portion of said pluralityof entities from a transaction information source.
 42. The system ofclaim 37, wherein said list database receives positional informationrelating to said financial institution and wherein said trading systemdenies said trade request based on said positional information.
 43. Thesystem of claim 37, wherein said list database receives affiliatedirectorship information and wherein said trading system denies saidtrade request based on said affiliate directorship information.
 44. Amethod for monitoring trading activity of a trading system operated by afinancial institution in accordance with a compliance program, themethod comprising the steps of; storing a plurality of entities, saidfinancial institution being associated with each of said plurality ofentities; receiving a trade request to trade a security of an entity;determining whether said entity is included in said plurality ofentities; and allowing said trade request if said entity is not includedin said plurality of entities.
 45. The method of claim 44, wherein saidentity is included in at least one of said plurality of entities havinga transaction type and said request to trade has an activity type andwherein the step of allowing said trade request includes the step of:allowing said trade request based on said transaction type and saidactivity type.
 46. The method of claim 45, wherein said transaction typeis selected from a group including mergers and acquisitions, initialpublic offerings and tender offers.
 47. The method of claim 45, whereinsaid activity type is selected from a group including principalactivity, market making activity, positional trading activity andderivative trading activity.
 48. The method of claim 44, furthercomprising the step of: receiving at least a portion of said pluralityof entities from a transaction information source.
 49. The method ofclaim 44, further comprising the steps of: receiving positionalinformation relating to said financial institution; and denying saidtrade request based on said positional information.
 50. The method ofclaim 44, further comprising the steps of: receiving affiliatedirectorship information; and denying said trade request based on saidaffiliate directorship information.